Correlation Between PayPal Holdings and INTERNATIONAL

Can any of the company-specific risk be diversified away by investing in both PayPal Holdings and INTERNATIONAL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PayPal Holdings and INTERNATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PayPal Holdings and INTERNATIONAL BUSINESS MACHS, you can compare the effects of market volatilities on PayPal Holdings and INTERNATIONAL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PayPal Holdings with a short position of INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PayPal Holdings and INTERNATIONAL.

Diversification Opportunities for PayPal Holdings and INTERNATIONAL

0.0

Correlation Coefficient

PayPal Holdings  INTERNATIONAL

Pay attention - limited upside

The 3 months correlation between PayPal and INTERNATIONAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PayPal Holdings and INTERNATIONAL BUSINESS MACHS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL BUSINESS and PayPal Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PayPal Holdings are associated (or correlated) with INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL BUSINESS has no effect on the direction of PayPal Holdings i.e., PayPal Holdings and INTERNATIONAL go up and down completely randomly.

Pair Corralation between PayPal Holdings and INTERNATIONAL

If you would invest (100.00) in INTERNATIONAL BUSINESS MACHS on November 19, 2024 and sell it today you would earn a total of  100.00  from holding INTERNATIONAL BUSINESS MACHS or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PayPal Holdings  vs.  INTERNATIONAL BUSINESS MACHS

PayPal Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PayPal Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PayPal Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

INTERNATIONAL BUSINESS

Risk-Adjusted Performance

Very Weak

Over the last 90 days INTERNATIONAL BUSINESS MACHS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTERNATIONAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PayPal Holdings and INTERNATIONAL

The main advantage of trading using opposite PayPal Holdings and INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PayPal Holdings position performs unexpectedly, INTERNATIONAL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in INTERNATIONAL will offset losses from the drop in INTERNATIONAL's long position.

The idea behind PayPal Holdings and INTERNATIONAL BUSINESS MACHS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.